Construction Drilling, Inc. v. Engineers Construction, Inc.

NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40 as well as formal
revision before publication in the Vermont Reports. Readers are requested to notify the Reporter
of Decisions by email at: JUD.Reporter@vermont.gov or by mail at: Vermont Supreme Court, 109
State Street, Montpelier, Vermont 05609-0801, of any errors in order that corrections may be made
before this opinion goes to press.
2020 VT 38
Nos. 2019-096 & 2019-205
Construction Drilling, Inc. Supreme Court
On Appeal from
v. Superior Court, Chittenden Unit,
Civil Division
Engineers Construction, Inc. December Term, 2019
Helen M. Toor, J.
Erin Miller Heins of Langrock Sperry & Wool, LLP, Burlington, for Plaintiff-Appellant/
Cross-Appellee.
Darren R. Misenko of Misenko Construction Law, Waterbury Center, and William Alexander
Fead of Fead Construction Law, PLC, Burlington, for Defendant-Appellee/Cross-Appellant.
PRESENT: Reiber, C.J., Robinson, Eaton and Carroll, JJ., and Morris, Supr. J. (Ret.),
Specially Assigned
¶ 1. EATON, J. Subcontractor Construction Drilling, Inc. (CDI) appeals from the trial
court’s judgment on the merits in its breach-of-contract claim against Engineers Construction, Inc.
(ECI). CDI contends that the trial court erred in: (1) holding that the terms of the parties’
subcontract required CDI to request a change order before it billed ECI for “drilling in
obstructions” in excess of CDI’s bid price; (2) denying CDI’s motions to reopen the evidence and
for a new trial; and (3) awarding ECI $234,320 in attorneys’ fees under the Prompt Payment Act.
ECI cross-appeals, arguing that the trial court improperly allowed CDI’s owner to offer opinion
testimony absent a finding of reliability under Vermont Rule of Evidence 702 and maintaining that
his testimony could not have met this standard in any event. Therefore, should this Court reverse
the trial court’s denial of CDI’s breach-of-contract claim, ECI asserts that the matter must be
remanded for a new trial without such testimony. We affirm, and therefore do not reach the issue
raised in ECI’s cross-appeal.
¶ 2. Following a five-day bench trial, the court made the following factual findings by
a preponderance of the evidence. ECI obtained the contract for a railroad-bridge reconstruction
project planned by the town of Hartford. The contract called for twenty-eight underground
structural supports, known as “micropiles,” to be installed in locations designated by the town’s
engineering firm. ECI entered a subcontract with CDI pursuant to which CDI—which had
expertise in this area, having previously installed between 100 and 200 micropiles—was to
complete that portion of the work.
¶ 3. Micropiles are drilled using hollow metal tubes, known as “casings,” which attach
one atop the other. The bottommost casing is fitted with a drill bit. As the bit spins into the ground,
the drill rig forces liquid down the center of the casings. This liquid pushes underground material
up the space surrounding the casings and out of the borehole. When the drill reaches design depth,
grout and rebar are installed through the center of the casings. Some of the casings are removed,
while others are left underground in order to strengthen the piles. Finally, a concrete slab is placed
atop the piles to distribute the load—in this case, the weight of the trains crossing the bridge.
¶ 4. The subcontract between the parties set a flat price for CDI’s work, but included a
clause providing that, if CDI was “drilling in obstructions” which necessitated CDI spending more
than four hours to complete drilling the hole, the price would be adjusted by payment of $920.00
per rig hour and the cost of drill bits. A separate provision stated that CDI could request a change
order adding or deducting costs “when changes in the work are encountered or expected.” The
subcontract also incorporated by reference the specifications, schedule, and general conditions in
2
ECI’s contract with the town. As trains were to continue running during construction, the project
involved “[a] lot of planning and work with the railroad . . . to minimize conflicts.”
¶ 5. CDI began drilling the first pile, designated as NC-8, on August 28, 2013. The
following day, the NC-8 borehole reached design depth. The driller then temporarily stopped work
on NC-8 in order to assist a colleague installing grout in a different pile. When the driller returned
to work on NC-8, the drill became stuck. For weeks, CDI endeavored without success to free the
casing. It used various means to do so, including drilling a narrower “side hole” in hopes of
loosening the stuck casing.
¶ 6. However, at no point did CDI advise ECI that it considered the underlying issue to
be “drilling through obstructions,” a circumstance which would trigger the added-cost provision
of the subcontract. As a result, while ECI was aware that the casing was stuck, its general
superintendent did not believe that CDI’s attempts to free the equipment would result in additional
costs to ECI. Had the superintendent known that CDI would seek to bill ECI for its efforts pursuant
to the added-cost provision, he would have issued a “stop work” order. Rather than struggling to
finish NC-8, it would have been possible to drill a new pile; this would have cost approximately
$9600.
¶ 7. Nineteen days later, the casing was finally removed when a jack was brought to the
site to apply 150,000 pounds of pressure. ECI only learned of CDI’s belief that efforts to free the
casing constituted “drilling in obstructions” when CDI subsequently billed ECI for $120,000 in
additional charges for its efforts to free the casing. ECI denied the claim, and CDI sued for breach
of the subcontract on this basis.1
1
Below, CDI also argued breach of the subcontract relative to ECI’s refusal to pay bills
for excess grout and train delays. The trial court ruled in favor of CDI on the former issue, and in
favor of ECI on the latter. Neither party challenges these rulings on appeal. However, the dissent
points out that because the excess-grout claim was subject to the same additional-items provision
governing the drilling-in-obstructions claim, the trial court’s holdings on these two points are
inconsistent. Post, ¶ 37. We agree—had the excess-grout ruling been appealed, we would find it
3
¶ 8. At trial, the parties presented differing theories as to the cause of the stuck casing.
ECI argued that CDI left NC-8 without drill liquid circulating through it for too long, causing the
hole to collapse around the casing and create “side friction” which prevented its removal, and that
this circumstance did not represent “drilling in obstructions” within the meaning of the
subcontract. CDI contended that the polymer used in the drilling liquid would have kept the hole
from collapsing regardless of whether the liquid was being run through it while the drill rig was
shut down. It argued that either the teeth of the drill bit had become stuck in a boulder, or, after
drilling stopped, boulders shifted underground, trapping the bit and casing, both circumstances
which constituted “drilling in obstructions.”
¶ 9. In its subsequent ruling on the merits, the trial court found that the more likely cause
of the stuck casing was a boulder or boulders shifting into the space around the casing after drilling
had finished, as CDI had argued. Therefore, it concluded, CDI’s efforts to free its equipment
constituted “drilling in obstructions” within the meaning of the added-items clause. However, the
court held that ECI’s failure to pay these added costs was not a breach of the subcontract because
such obstruction drilling was a change in the work, and CDI was therefore required to request a
change order in the manner specified by the subcontract before billing for the added work. Finally,
the court held that ECI was the “substantially prevailing party” under Vermont’s Prompt Pay Act,
a conclusion which entitled the contractor to recovery of its “reasonable attorney’s fees” and
expenses. 9 V.S.A. § 4007(c).
¶ 10. After the court issued its ruling on the merits, but before judgment was entered,
CDI filed a motion to reopen the evidence. It sought to offer the testimony of CDI’s project
foreman, whom they were previously unable to locate. CDI proffered that the foreman would
in error. However, because ECI did not appeal the excess-grout ruling, and because we affirm the
trial court’s decision, but not the analysis which led it to that decision, this inconsistency is
irrelevant.
4
testify to “conversations that he had on-site with ECI employees, including statements to those
employees that the work being done was ECI’s responsibility and [ECI] would be billed,” and
indicated that the foreman could provide an evidentiary foundation for his records related to the
project. CDI’s owner averred that he lost contact with the foreman after the foreman was involved
in a car accident on his way home from the Hartford project site, and detailed subsequent fruitless
efforts to contact him, including: numerous telephone calls and detailed voicemails explaining the
need for his testimony; inquiries made of his friends; and driving to his last known address, where
CDI’s owner knocked on multiple entry doors, called the foreman’s phone again to see if it would
ring inside the house, peered through the windows in search of evidence that the foreman lived
there, and ultimately taped a note to the door.
¶ 11. The trial court denied the motion, finding that the owner’s affidavit did not reflect
that the foreman’s whereabouts could not have been discerned prior to trial through the exercise
of due diligence. Further, it held that CDI failed to show that the newly-discovered evidence was
likely to change the outcome of the case; indeed, the court had concluded in its merits ruling that
CDI was required to submit a request for a change order “through formal channels, not informal
notice to someone on the job site.” Following entry of judgment, CDI moved for a new trial on
identical grounds, or, in the alternative, requested that the court reconsider its ruling on the motion
to reopen the evidence. Although CDI proffered additional affidavits in connection with this
second motion, the court denied it on the same bases. Finally, the court ordered CDI to pay ECI a
total of $234,320 in attorneys’ fees, plus costs, pursuant to the Prompt Pay Act. This appeal
followed.
I. CDI’s Breach-of-Contract Claim
¶ 12. The trial court’s factual findings will be upheld unless they are clearly erroneous.
Sweet v. St. Pierre, 2018 VT 122, ¶ 10, 209 Vt. 1, 201 A.3d 978. However, the question of whether
a contract is ambiguous is a legal one, subject to de novo review. John A. Russell Corp. v. Bohlig,
5
170 Vt. 12, 16, 739 A.2d 1212, 1216 (1999); see also In re Affidavit of Probable Cause, 2019 VT
43, ¶ 3, __ Vt. __, 215 A.3d 694 (describing de novo review as “nondeferential and plenary”). “If
the court concludes the writing is unambiguous, it must declare the interpretation as a matter of
law”; if it reaches the opposite conclusion, interpretation of the ambiguous contract becomes a
question of fact. John A. Russell Corp., 170 Vt. at 16, 739 A.2d at 1216.
¶ 13. Here, the trial court drew no explicit legal conclusion as to whether the subcontract
was ambiguous. For its part, CDI argues that the subcontract unambiguously permitted CDI to
bill for drilling in obstructions without submitting a request for a change order to ECI. ECI
counters that the subcontract is ambiguous as to whether drilling in obstructions constituted a
“change in the work” triggering the change-order requirement, and that principles of interpretation
applicable to ambiguous contracts support the trial court’s conclusion that the change-order
requirement encompassed claims for drilling in obstructions. Although we part ways with the trial
court’s analysis, we affirm its holding that CDI was required to submit a change-order request if
it wished to bill ECI for drilling in obstructions.2 See Gilwee v. Town of Barre, 138 Vt. 109, 111,
412 A.2d 300, 301 (1980) (observing that we may affirm a decision where “the record . . . indicates
any legal ground for justifying the result,” because “[a] trial court can achieve the right result for
the wrong reason”).
¶ 14. The mere “fact that a dispute has arisen as to proper interpretation does not
automatically render [contract] language ambiguous.” Isbrandtsen v. N. Branch Corp., 150 Vt.
2
We cannot agree with the dissent’s characterization of our analysis as an adoption of “the
trial court’s faulty reasoning.” Post, ¶ 38. At its inception, our analysis fundamentally diverges
from that employed by the trial court: While we find the contract language unambiguous, the trial
court’s reliance on tools of construction suggests that it reached the opposite conclusion. See Kipp
v. Estate of Chips, 169 Vt. 102, 107, 732 A.2d 127, 131 (1999) (holding that where contract
language is unambiguous, “the court must accept the plain meaning of the language and not look
to construction aids”). Moreover, while the trial court found that the ECI-town contract
incorporation clause was “unclear,” and did not rely on it in reaching its legal conclusion, we hold
that the incorporation clause is fundamental to our understanding of the contract’s plain language.
6
575, 581, 556 A.2d 81, 85 (1988). Rather, “[i]f a contract, though inartfully worded or clumsily
arranged, fairly admits of but one interpretation, it may not be said to be ambiguous or fatally
unclear.” Id. at 580-81, 556 A.2d at 85 (quotation omitted). To determine whether a contract
“fairly admits of but one interpretation,” the “agreement must be viewed in its entirety, with an
eye toward giving effect to all material parts in order to form a harmonious whole.” Id. at 580,
556 A.2d at 85; see also In re Grievance of Verderber, 173 Vt. 612, 615, 795 A.2d 1157, 1162
(2002) (mem.) (“[W]hen the language of the contract is clear on its face, we will assume that the
intent of the parties is embedded in its terms. We must, however, give effect to every part of the
instrument and form a harmonious whole from the parts.” (citation omitted)); John A. Russell
Corp., 170 Vt. at 17, 739 A.2d at 1216-17 (“To determine the meaning of a specific provision of a
contract, we consider the whole instrument and construe it in harmony if possible.”). In thus
seeking to harmonize contractual provisions, we may “read terms into a contract” only where “they
arise by necessary implication.” In re Stacy, 138 Vt. 68, 71, 411 A.2d 1359, 1361 (1980); see also
Downtown Barre Dev. v. C & S Wholesale Grocers, Inc., 2004 VT 47, ¶ 9, 177 Vt. 70, 857 A.2d
263 (explaining that courts may insert terms into a contract by implication only where “the
implication arises from the language employed or is indispensable to effectuate the intention of
the parties” and that “[v]aguely implied conditions may not be inserted . . . particularly when those
conditions are inconsistent with the express language of the agreement”).
¶ 15. Because we must view the subcontract in its entirety, with an eye to harmonizing
each of its material parts, we begin by identifying those portions germane to this dispute. See
Isbrandtsen, 150 Vt. at 580, 556 A.2d at 85; Verderber, 173 Vt. at 615, 795 A.2d at 1162. Two
documents, ECI’s subcontractor agreement and CDI’s bid proposal, form the basic framework of
the subcontract. Both reflect that the bid proposal “is included in and forms an integral part” of
the subcontractor agreement, taking “precedence over any other terms and conditions of such
Subcontract.” The subcontractor agreement, in turn, provides that “ECI’s Contract with [the town
7
of Hartford] is incorporated into this Agreement by reference and becomes part of this Agreement.
The Subcontractor agrees to accept the specifications, schedule, and general conditions in ECI’s
Contract with [the town of Hartford], except for exclusions in the Subcontractors proposal
accepted by ECI.”
¶ 16. The trial court observed in dicta that the incorporation provision was “unclear,”
noting that “ECI rests some of its legal arguments on terms in the contract with the town that it
says apply to CDI, but the court is at a loss to understand how obligations ECI had to the town can
become obligations of CDI to ECI merely by saying the spec[ifications], schedule[,] and conditions
are incorporated in the subcontract.” However, this Court finds the import of the incorporation
clause straightforward, in light of a fourth material provision of this subcontract—and, indeed, all
contracts.
¶ 17. “An underlying principle implied in every contract is that each party promises not
to do anything to undermine or destroy the other’s rights to receive the benefits of the agreement.”
Carmichael v. Adirondack Bottled Gas Corp. of Vt., 161 Vt. 200, 208, 635 A.2d 1211, 1216
(1993). This “implied covenant of good faith and fair dealing exists to ensure that parties to a
contract act with ‘faithfulness to an agreed common purpose and consistency with the justified
expectations of the other party.’ ” Id. (quoting Restatement (Second) of Contracts § 205 cmt. a
(1981)). Thus, “[e]ach party to a contract makes the implied promise that each will not do anything
to undermine or destroy the other’s rights to receive the benefits of the agreement.” Southface
Condo. Owner’s Ass’n v. Southface Condo. Ass’n, 169 Vt. 243, 246, 733 A.2d 55, 58 (1999)
(quotation omitted). The court was correct in noting that ECI’s obligations to the town did not
become CDI’s obligations to ECI by virtue of this provision. However, in incorporating by
reference its contract with the town, ECI made explicit to CDI both the common purpose
underlying the subcontract and the benefits ECI expected to receive through the subcontract. CDI
therefore impliedly agreed to do nothing to undermine ECI’s thus-identified rights under the town
8
contract.3 See id. In short, the incorporation clause put CDI on notice that the CDI-ECI contract
should be interpreted with fidelity to the management structure of the project as a whole. With
this understanding of the relevant contractual provisions, we turn to the question of what is required
of the parties under each section, and then consider whether those requirements may be read to
create a harmonious whole. See Isbrandtsen, 150 Vt. at 580, 556 A.2d at 85.
¶ 18. CDI’s bid proposal provides a flat price of $266,600 for the work agreed to under
the subcontract. This cost is itemized to include a single mobilization of drilling equipment, “1700
LF @ $128.00/LF,” and “Pile Load Test One (1) Each.” The proposal further notes that the price
is based on a forty-hour work week and “drill holes for pile installation” of five-eighths inch
diameter. At issue here, however, is the provision stating that “the price quoted shall be adjusted
during the course of the work by payment of the following additional items.” These “additional
items” include “payment of $920.00 per rig hour, excluding cost of bits (bit consumption will be
calculated at cost plus 10%) for drilling in obstructions such as but not limited to steel, timbers,
old foundations and boulders that requires more than 4 hours to complete drilling the hole.” The
bid proposal does not dictate a mechanism through which such adjustments are to be made.
However, the subcontract—through ECI’s subcontractor agreement—provides that
[a] request for a Change Order may be submitted by the
Subcontractor when changes in the work are encountered or
expected. The request shall include documentation on the change,
add or deduct costs, and possible changes to the schedule. No work
shall proceed on a Change Order until approved in writing by ECI.
CDI urges us to conclude that the “additional items” clause provides “that if CDI was drilling in
obstructions, including boulders, and it took more than four hours to complete drilling the hole,
then CDI was entitled to payment of $920 per rig hour,” and no notice to ECI was required. It
3
Indeed, the trial court ruled that CDI was not entitled to additional payment under the
subcontract for delays caused by train traffic during work hours, see supra, note 1, because “[i]t
was clear from the subcontract that the work had to be done around the train schedules, since the
contract with the town was incorporated into the subcontract.”
9
further argues that because the bid proposal contemplated the possibility that CDI would encounter
subsurface obstructions necessitating more than four hours to complete drilling each hole, and set
a price which would apply in this circumstance, drilling in an obstruction was not a “change in the
work” triggering ECI’s change-order clause.4
¶ 19. We cannot agree. We are obligated to harmonize the two provisions at issue if they
may be harmonized, see Isbrandtsen, 150 Vt. at 580, 556 A.2d at 85, and the manner in which they
fit together is abundantly clear: the change-order clause in the subcontractor agreement was the
mechanism by which the cost adjustment contemplated in the bid proposal was to be carried out.
See John A. Russell Corp., 170 Vt. at 18, 739 A.2d at 1217 (finding contract unambiguous after
rejecting construction of paragraph which would conflict with other paragraph and stating
“[v]iewing the contract as a whole and construing the provisions in harmony, this is the only
reasonable construction”); cf. Madowitz v. The Woods at Killington Owners’ Ass’n, 2010 VT 37,
¶ 17, 188 Vt. 197, 6 A.3d 1117 (finding contract ambiguous where “[t]here is simply no
harmonious way to read . . . conflicting provisions”). The only mechanism to “add . . . costs”—
such as additional costs associated with “additional items” as identified in the bid proposal—was
the change-order provision.
¶ 20. The change-order request clause was implicated because CDI’s attempts to free the
casing were a “change[] in the work.” CDI’s bid proposal delineated a scope of work which
included only those items reflected in the flat fee of $266,600. CDI budgeted four hours of drilling
per hole at the contract price, classifying all further drilling necessary to complete the hole as an
4
In support of this contention, CDI points to the trial testimony of ECI’s project manager,
who stated that drilling in obstructions did not represent a change in the scope of CDI’s work.
However, the trial court made no finding based on this testimony, in fact concluding that “[d]rilling
in obstructions that were not expected based upon the test borings were ‘changes in the work.’ ”
“[I]t is for the trial court, not this Court, to weigh the evidence and assess the credibility of
witnesses.” Estate of George v. Vt. League of Cities & Towns, 2010 VT 1, ¶ 36, 187 Vt. 229, 993
A.2d 367. Therefore, the project manager’s statement has no bearing on our analysis.
10
“additional item.” The clear import of the word “additional” is that such obstruction drilling was
not a part of the “work” contemplated in the contract, as measured by the contract price. See
Additional Work, Black’s Law Dictionary (11th ed. 2019) (“Work that results from a change or
alteration in plans concerning the work required, usu[ally] under a construction contract; added
work necessary to meet the performance goals under a contract.”). Moreover, the work done to
free the casing—which included drilling a smaller “side hole” and bringing a jack to the site—was
substantively different work than the work done to install the pile. The subcontract was clear about
the size and number of holes CDI was expected to drill, which did not include the side hole. The
fact that a jack was not already on site suggests that it was not otherwise necessary to the work.
Therefore, the trial court was correct in concluding that all obstruction drilling which took place
after four hours of drilling a given micropile was a “change in the work.”
¶ 21. Our conclusion that the subcontract admits of but one interpretation—that the
change-order clause was the mechanism by which the additional-items clause was to be
effectuated—is buttressed by the two additional contract provisions we identify as material to this
dispute. Pursuant to the terms of ECI’s contract with the town—as incorporated by reference into
the subcontract—in order for ECI to pass costs for differing subsurface conditions on to the town,
ECI was required to give notice to the town in writing before further disturbing the conditions or
continuing to work. Specifically, if ECI encountered
subsurface or latent physical conditions . . . at the site differing
materially from those specified in the Contract or if unknown
physical conditions of an unusual nature, differing materially from
those ordinarily encountered and generally recognized as inherent
in the work provided for in the Contract, are encountered at the site,
the party discovering such conditions shall promptly notify the other
party in writing of the specific differing conditions before they are
disturbed and before the affected work is performed.
Receipt of such notification would trigger an investigation by the engineer “to determine if the
conditions materially differ and will cause an increase or decrease in the cost or time required for
11
the performance of any work under the Contract[;]” but no adjustments were allowed through this
provision “for any effects caused on unchanged work.” If the written notice is not provided as
required, “[n]o Contract adjustment that results in a benefit to the Contractor will be allowed.”
Similarly,
[i]n order to bring a claim for additional compensation not clearly
covered by the Contract for conditions substantially different than
represented by the Contract and not ordered by the Engineer as Extra
Work as defined herein, the Contractor must provide written notice
. . . to the Engineer before conducting any work or purchasing any
materials subject to the claim.
Failure to file such notice of intent was waiver of ECI’s “right to bring the Claim under the
Contract” with the town.
¶ 22. Significantly, because CDI did not advise ECI that the drill was stuck as a result of
what it believed to be an obstruction, ECI was deprived of the opportunity to seek to either mitigate
those costs5 or to pass them on to the town through the latent-conditions provision of the town
contract. See Carmichael, 161 Vt. at 209, 635 A.2d at 1217 (recognizing that “bad faith inheres
in . . . ‘willful failure to mitigate damages.’ ” (quoting Restatement (Second) of Contracts § 205
cmt. e)). In doing so, CDI parted ways with ECI’s justified expectations—expectations which
were made particularly clear to CDI by virtue of incorporation of the town contract—undermined
its contractual rights, and prevented it from obtaining the full benefit of its bargain.6 See
5
Indeed, drilling a replacement pile was an option. This would have cost approximately
$110,400 less than the amount CDI billed for its nineteen-day effort to finish NC-8.
6
Contrary to the dissent’s characterization, we do not hold that CDI’s failure to file a
change-order request before drilling in obstructions “plac[ed] ECI in breach of its contract with
the town.” Post, ¶ 39. Rather, we hold that this failure prevented ECI from obtaining the full
benefit of its bargain with CDI, because ECI’s ability to seek to pass costs for drilling in
obstructions to the town was contingent on CDI providing ECI with notice of these obstructions
before the affected work was performed. Moreover, we find the dissent’s suggestion that the
obstruction in NC-8 did not satisfy the ECI-town contract’s definition of a differing subsurface
condition because “encountering a subterranean physical obstruction such as a boulder during a
drilling project is not unusual” without merit. First, that definition could have been separately
satisfied by a material difference from those conditions “specified in the Contract,” and second,
12
Restatement (Second) of Contracts § 205 cmt. d (recognizing as one type of bad faith “evasion of
the spirit of the bargain” and noting that “bad faith may . . . consist of inaction”).
¶ 23. “Generally, an implied duty of good faith and fair dealing is not understood to
interpose new obligations about which the contract is silent, even if inclusion of the obligation is
thought to be logical and wise.” Downtown Barre Dev., 2004 VT 47, ¶ 18 (quotation omitted).
Here, however, the subcontract is not silent: the change-order requirement is not a “new
obligation.” The purpose of the subcontract between ECI and CDI was to delineate how CDI
would complete one component of a much larger, dynamic project involving multiple variables
and decision-makers, as well as an active train schedule. CDI urges an interpretation of the
subcontract which would turn this project-management scheme on its head, allowing a
subcontractor—rather than the decision-makers designated in the subcontract and the contract—
to unilaterally control the cost and schedule of the project. Under CDI’s view, it could incur costs
more than ten times the cost of drilling a new hole and roughly 50% above the contract price
without any request for a change order.
¶ 24. CDI suggests that the additional-items provision would be superfluous if the items
listed therein were nonetheless subject to the change-order requirement. But this argument ignores
the reality that the additional-items provision had an important independent effect: it set the price
for such additional work, should it be ordered, obviating the need for further discussion or
bargaining on this point while the time-sensitive project was underway. However, it did not vest
in CDI the power to determine how to proceed, or give it the unfettered right to expend any amount
necessary to free its drill with no notice to ECI of its intent to bill for these efforts.
whether a given circumstance is “unusual” is not measured by our understanding of what the
process of drilling generally entails. And in any event, the more important consideration is that
because CDI did not request a change order, ECI never had the opportunity to argue that the either
prong of the differing-conditions provision of its contract with the town applied.
13
II. Motions to Reopen the Evidence and for a New Trial
¶ 25. CDI argues that the trial court erred in denying its motions to reopen the evidence
and for a new trial. Both rulings are subject to review for abuse of discretion. See In re Bjerke
Zoning Permit Denial, 2014 VT 13, ¶ 16, 195 Vt. 586, 93 A.3d 82 (“The trial court has broad
discretion to permit further evidence to be offered after the close of evidence in a trial but prior to
entry of final judgment.”); Brueckner v. Norwich Univ., 169 Vt. 118, 132-33, 730 A.2d 1086, 1097
(1999) (“A decision concerning a motion for new trial pursuant to V.R.C.P. 59(a) lies within the
sound discretion of the trial court and will be reversed only where there has been an abuse of
discretion.”).
¶ 26. We find no abuse of discretion here. The trial court was correct in concluding that
the proffered testimony regarding conversations on the job site could have no bearing on the
outcome of the case. Under the subcontract, any request for a change order “shall include
documentation on the change, add or deduct costs, and possible changes to the schedule.” Further,
no work could proceed on the change order “until approved in writing by ECI.” The evidence
proffered by CDI had no bearing on the relevant question, which was not whether ECI had notice
that CDI considered the work to be drilling in obstructions, but whether CDI submitted a formal
request for a change order including the necessary information. Because this was sufficient ground
to deny both motions, we do not reach the merits of the trial court’s conclusion that CDI’s efforts
to locate the foreman did not constitute due diligence.
III. Attorneys’ Fees
¶ 27. CDI implicitly concedes that if the trial court ruled correctly on the breach-of-
contract claim, it also correctly found ECI to be the “substantially prevailing party,” entitling it to
and award of attorney’s fees and costs under the Prompt Payment Act. 9 V.S.A. § 4007(c).
However, CDI contends that the trial court erred in holding $234,320 to be a reasonable fee amount
and urges us to remand on this basis. We review a trial court’s ruling on the amount of attorneys’
14
fees awarded pursuant to the Prompt Payment Act for an abuse of discretion. The Electric Man,
Inc. v. Charos, 2006 VT 16, ¶ 6, 179 Vt. 351, 895 A.2d 193.
¶ 28. CDI advances two theories in support of its argument. First, it contends that the
fee awarded should be reduced because it is “disproportionate to the value of the case.” Second,
it argues that, while the trial court found some duplication of attorney time in ECI’s bills, further
reduction is necessary, because it was not reasonable for two attorneys to do the same work. As
the trial court recognized, an award of attorneys’ fees in excess of the judgment amount is not per
se unreasonable. See Walsh v. Cluba, 2015 VT 2, ¶ 21, 198 Vt. 453, 117 A.3d 798 (affirming fee
award four times damage award). “The ultimate question is not whether the attorney’s fee award
is proportional to the damages, but rather whether the fee award is reasonable given the demands
of the case.” Id. (quotation omitted). The trial court acted within its discretion in determining that
the demands of this case rendered the fee award reasonable.
¶ 29. We reach the same conclusion with respect to the argument that the award was
excessive because of unreasonable duplication of the efforts of ECI’s two attorneys. “While a
court can generally reduce the number of hours charged by attorneys due to duplication, there are
situations in which a certain level of duplication between attorneys is reasonable.” Spooner v.
Town of Topsham, 2010 VT 71, ¶ 18, 188 Vt. 293, 9 A.3d 672 (citations omitted). Such reduction
is called for “only if the attorneys are unreasonably doing the same work. An award for time spent
by two or more attorneys is proper as long as it reflects the distinct contribution of each lawyer to
the case and the customary practice of multiple-lawyer litigation.” Id. (quoting Afro-American
Patrolmen’s League v. City of Atlanta, 817 F.2d 719, 726 (11th Cir. 1987)). The trial court found
some unreasonable duplication of efforts and accordingly reduced the award by that amount.
However, it concluded “that the specialized legal skills of both defense counsel, who specialize in
construction law, were of importance in this case.” It also recognized that, in “paper-intensive
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case[s]” like this one, “with many documents to be managed[,] [t]wo lawyers . . . are always better
than one at trial.” This conclusion, too, fell well within the court’s discretion.
¶ 30. Because we affirm the trial court’s decision on the merits of CDI’s breach-of-
contract claim, we do not reach the issue raised in ECI’s cross-appeal.
Affirmed.
FOR THE COURT:
Associate Justice
¶ 31. CARROLL, J., dissenting. In my view, the contract between the parties in this
case clearly entitled CDI to recover the costs it incurred in drilling through the obstruction it
encountered in micropile NC-8. The contract did not require CDI to seek approval from ECI
before doing the work because drilling through an obstruction was not a “change in work.”
Accordingly, I would reverse the decision below and remand for the trial court to enter judgment
in favor of CDI.
¶ 32. It is a bedrock principle that “we interpret contracts to give effect to the parties’
intent, which we presume is reflected in the contract’s language when that language is clear.” In
re Adelphia Bus. Sols. of Vt., Inc., 2004 VT 82, ¶ 7, 177 Vt. 136, 861 A.2d 1078. “When the plain
language of the writing is unambiguous, we take the words to represent the parties’ intent, and the
plain meaning of the language governs our interpretation of the contract.” Southwick v. City of
Rutland, 2011 VT 105, ¶ 5, 190 Vt. 324, 30 A.3d 1298 (citation omitted). “[T]he fact that a dispute
has arisen as to proper interpretation does not automatically render the language ambiguous.”
Isbrandtsen v. N. Branch Corp., 150 Vt. 575, 581, 556 A.2d 81, 85 (1988). Similarly, an unwise
or risky business decision does not necessarily make a commercial contract provision ambiguous
or unenforceable. See Purcell Tire & Rubber Co. v. Exec. Beechcraft, Inc., 59 S.W.3d 505, 508
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(Mo. 2001) (“Sophisticated parties have freedom of contract—even to make a bad bargain, or to
relinquish fundamental rights.”)
¶ 33. The contract between the parties consisted of CDI’s bid proposal and the
subcontractor agreement prepared by ECI. The subcontractor agreement provided that “CDI’s
proposal dated January 11, 2013 is included in and forms an integral part of this subcontract and
takes precedence over any other terms and conditions of the subcontract.” The bid proposal set a
flat price of $266,000 for CDI’s work on the project, which included mobilizing for the project,
drilling one test pile load, and drilling micropiles. It contained a provision permitting CDI to
upwardly adjust the price by specified amounts for three additional items: excess grout, standby
costs for certain work stoppages, and drilling in obstructions. The additional-items provision
defined obstructions to include steel, timbers, old foundations, and boulders that required more
than four hours to complete drilling the hole. The additional-items provision stated that “[t]he
price quoted shall be adjusted during the course of the work by . . . payment of $920.00 per rig
hour” for drilling in obstructions. (Emphasis added.) It did not state that CDI was required to seek
approval from ECI before drilling in obstructions at the additional rate.
¶ 34. The additional-items provision is unambiguous: it allowed CDI to unilaterally
adjust the contract price upward for the additional time required to drill through any obstructions
encountered in drilling the micropiles. The parties—both sophisticated business entities—clearly
understood that obstructions could be encountered during the drilling project and made an
agreement to deal with that variable. No “mechanism,” other than the conditions specified in the
provision, was required to trigger the additional rates set forth in the additional-items provision.
Cf. ante, ¶ 18.
¶ 35. The trial court found that CDI was drilling in an obstruction within the meaning of
the additional-items provision when the casing became stuck in micropile NC-8. Its finding is
supported by the evidence. The court therefore should have enforced the plain language of the
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additional-items provision and awarded CDI the additional costs it incurred to complete drilling
the hole. See Downtown Barre Dev. v. C & S Wholesale Grocers, Inc., 2004 VT 47, ¶ 8, 177 Vt.
70, 857 A.2d 263 (explaining that unambiguous contract language will be enforced according to
its terms).
¶ 36. Instead of enforcing the provision, however, the trial court held that “common
sense” implied a condition that CDI seek a change order before proceeding. It reasoned that
incurring additional costs to drill through the obstruction constituted a “change in work” for which
prior approval by ECI was required. This was error. The additional-items provision contained no
such notice requirement. Drilling through obstructions did not constitute a change in work because
the provision expressly anticipated that such work could be necessary during the course of the
project. Unless the trial court found the provision to be ambiguous—which it did not—it was
required to enforce the contract according to its terms. “Though we consider an agreement as a
whole when examining individual provisions, we will not insert vaguely implied conditions,
particularly when those conditions are inconsistent with the express language of the agreement.”
Madowitz v. Woods at Killington Owners’ Ass’n, 2010 VT 37, ¶ 12, 188 Vt. 197, 6 A.3d 1117
(quotation and alterations omitted). It was improper for the trial court to imply a condition
requiring CDI to obtain a change order for drilling in obstructions when such work was expressly
anticipated as a potential part of the ordinary process of drilling micropiles.
¶ 37. Furthermore, the court’s interpretation is inconsistent with its decision to award
CDI the costs of excess grout. CDI’s claim for the excess grout was based on the same additional-
items provision as its claim for the additional costs of drilling through the obstruction in micropile
NC-8. CDI did not request a change order for either of these items. The trial court did not explain
why CDI could charge for the excess grout but not for drilling through the obstruction.
¶ 38. The majority adopts the trial court’s faulty reasoning and further asserts that CDI
changed the work by bringing in a jackhammer and changing its method of drilling to free the
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casing from the obstruction in micropile NC-8. Ante, ¶ 20. But the contract is not specific as to
the methods or equipment necessary to conduct the drilling, especially when an obstruction must
be dealt with. Indeed, the project specifications incorporated into the contract state that “the
micropile Contractor shall select the drilling method.” The majority’s interpretation is an
unrealistic stretching of the contract terms.
¶ 39. The majority goes on to conclude that if CDI was not required to notify ECI prior
to drilling through the obstruction, it would put ECI in the position of breaching its contract with
the town, which was incorporated by reference into the subcontract. Ante, ¶¶ 21-22. This
argument was not briefed by the parties or addressed by the trial court, and it is not supported by
the language of ECI’s contract with the town. The provision relied upon by the majority requires
ECI to notify the town only of excess billing expected to arise from an encounter with “subsurface
or latent physical conditions . . . at the site differing materially from those specified in the Contract
or . . . unknown physical conditions of an unusual nature, differing materially from those
ordinarily encountered and generally recognized as inherent in the work provided for in the
Contract.” ECI does not argue, and the trial court did not find, that the subsurface conditions
encountered by CDI differed materially from those specified in ECI’s contract with the town. And
encountering a subterranean physical obstruction such as a boulder during a drilling project is not
unusual. To the contrary: such conditions are inherent in drilling, which was the very reason there
was a separate provision in the subcontract which dealt with drilling in obstructions. ECI would
not have been required to get town approval to drill through the obstruction. Accordingly, CDI’s
actions did not violate the implied covenant of good faith and fair dealing by placing ECI in breach
of its contract with the town, as the majority asserts.
¶ 40. The majority faults CDI for unilaterally deciding to drill through the obstruction
without notifying ECI first. Unfortunately, ECI allowed CDI to do just that by agreeing to the
additional-items provision in the bid proposal. “[N]o court may rewrite unambiguous contractual
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terms to grant one party a better bargain than the one it made.” Downtown Barre Dev., 2004 VT
47, ¶ 14 (quotation omitted). The decisions of the majority and the trial court disregard the plain
language of the parties’ freely bargained-for contract. I therefore respectfully dissent.
¶ 41. I am authorized to state that Justice Robinson joins this dissent.
Associate Justice
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